{"id":871,"date":"2019-08-05T05:59:43","date_gmt":"2019-08-05T05:59:43","guid":{"rendered":"http:\/\/dahotreca.com.com\/?p=871"},"modified":"2019-08-05T05:59:43","modified_gmt":"2019-08-05T05:59:43","slug":"mca-has-notified-the-companies-amendment-act-2019","status":"publish","type":"post","link":"https:\/\/dahotreca.com\/?p=871","title":{"rendered":"MCA has notified the Companies (Amendment) Act, 2019"},"content":{"rendered":"\n

The MCA has notified the Companies (Amendment) Act,\n2019 and the provisions of which, shall be deemed to have come into force on\nthe 2nd day of November, 2018, except sections 6, 7 and 8, clauses (i), (iii)\nand clause (iv) of section 14, sections 20 and 21, section 31, sections 33, 34\nand 35, sections 37 and 38 which shall come into force on such date as the\nCentral Government may notify<\/strong><\/a>. The Amendment Act\ncontaining 44 clauses is being brought in to “ensure more accountability\nand better enforcement to strengthen the corporate governance norms and\ncompliance management in the corporate sector. The Act will tighten Corporate\nSocial Responsibility (CSR) compliance, re-categorisation of specific offences\nas civil offences and transfer certain responsibilities to National Company Law\nTribunal. The ACT has replaced the Ordinance promulgated in February 2019, will\nkeep a check of ‘shell companies’ and will promote ‘ease of doing business.<\/p>\n\n\n\n

The key features of the Amendment are :<\/strong><\/p>\n\n\n\n

1. Allowing subsidiaries of foreign companies to\nfollow different financial year for accounting;<\/p>\n\n\n\n

2. Measures to control ‘shell companies’;<\/p>\n\n\n\n

3. Sixteen sections of the Act are amended so as to\nmodify the punishment as provided in the said sections from fine to monetary\npenalties to lessen the burden upon the Special Courts.<\/p>\n\n\n\n

4. Amendments are made to Section 135 to carry\nforward the unspent corporate social responsibility amount, to a special\naccount to be spent within three financial years and transfer thereafter to the\nFund specified in Schedule VII, such as PM’s National Relief Fund.<\/p>\n\n\n\n

5. The Act provides for the punishment for\ndebarment from appointment as an auditor or internal auditor of a company, or performing\na company’s valuation, for a period between six months to 10 years in case of\nproven misconduct.<\/p>\n\n\n\n

6. The pecuniary limits of Regional Director\n(“RD”) to compound offences under section 441 of the Act is proposed\nto be increased. The threshold is increased to a fine up to Rs. 25 lakhs.<\/p>\n\n\n\n

7. A new clause has been inserted under the Section\n164 to state that violation of Section 165(1) shall be a ground for\ndisqualification of a director if he\/ she breaches the limits of maximum\ndirectorship allowed thereunder.<\/p>\n\n\n\n

8. The amendment to Section 241 empowers the\nCentral Government to move a matter before the NCLT against managerial\npersonnel on several grounds.<\/p>\n\n\n\n

9. Shifting of powers for conversion from public to\nprivate companies from National Company Law Tribunal (NCLT) to the central\ngovernment, as well as more clarity with respect to certain powers of the\nNational Financial Reporting Authority (NFRA).<\/p>\n\n\n\n

10. The Act provides more power to the Registrar of\nCompanies (ROC) to take strict action against those companies which are not\nworking as per the law. Registrar can remove the name of the company from the\nRegister of companies if it is not carrying on the operations.<\/p>\n\n\n\n

11. Amendment Act seeks to insert sub-section 1A to\nSection 29, which inter-alia mandates certain unlisted companies that the\nsecurities shall, in addition to being issued, also be held and transferred\nonly in dematerialized form after complying with the provisions of the\nDepositories Act, 1996 and regulations made thereunder. With this proposed move,\nall shareholders of all private companies shall have to get their holdings\ndematerialized.<\/p>\n\n\n\n

12. In case of corporate frauds revealed by an\ninvestigation by SFIO, the Central Government may make an application to NCLT\nfor passing appropriate orders for disgorgement of profits or assets of an\nofficer or person or entity which has obtained an undue benefit.<\/p>\n\n\n\n

13. Charges can only be registered within a period\nof 120 days from the date of creation and modification and ad-valorem fees\nshall also be charged over and above the additional fees in case of delayed\nfilings beyond 60 days.<\/p>\n\n\n\n

14.Rectification by Central Government\nin Register of charges in case of omission and or misstatement of any\nparticulars, in any filing previously made to the Registrar with respect to any\ncharge or modification thereof or with respect to any memorandum of\nsatisfaction or other entry made in pursuance of section 82 or section 83.<\/p>\n\n\n\n

15. If any company fails to file its annual return\nunder sub-section (4), before the expiry of the period specified therein, such\ncompany and its every officer who is in default shall be liable to a penalty of\nfifty thousand rupees and in case of continuing failure, with a further penalty\nof one hundred rupees for each day after the first during which such failure\ncontinues, subject to a maximum of five lakh rupees.<\/p>\n\n\n\n

16. If any company fails to furnish the Director\nIdentification Number under sub-section (1), such company shall be liable to a\npenalty of twenty-five thousand rupees and in case of continuing failure, with\na further penalty of one hundred rupees for each day after the first during\nwhich such failure continues.<\/p>\n\n\n\n

17. Section 203, non-compliance provisions amended\nto provide that if any company makes any default in complying with the\nprovisions of this section, such company shall be liable to a penalty of five\nlakh rupees and every director and key managerial personnel of the company who\nis in default shall be liable to a penalty of fifty thousand rupees and where\nthe default is a continuing one, with a further penalty of one thousand rupees\nfor each day after the first during which such default continues but not\nexceeding five lakh rupees.\u201d<\/p>\n\n\n\n

18. Penalty provided under section 447 of the\nprincipal Act, is increased from \u201ctwenty lakh rupees\u201d, to \u201cfifty lakh rupees\u201d.<\/p>\n\n\n\n

19. Insertion of new section 454A to\nprovide Penalty for repeated defaults by a company or an officer of a\ncompany or any other person having already been subjected to a penalty for\ndefault under any provisions of this Act.<\/p>\n\n\n\n

20. The Companies (Amendment) Second Ordinance,\n2019 is repealed on notification of the Act.<\/p>\n","protected":false},"excerpt":{"rendered":"

The MCA has notified the Companies (Amendment) Act, 2019 and the provisions of which, shall be deemed to have come into force on the 2nd day of November, 2018, except sections 6, 7 and 8, clauses (i), (iii) and clause (iv) of section 14, sections 20 and 21, section 31, sections 33, 34 and 35, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"rttpg_featured_image_url":null,"rttpg_author":{"display_name":"User Collaborator","author_link":"https:\/\/dahotreca.com\/?author=3"},"rttpg_comment":0,"rttpg_category":"Registrar of companies<\/a>","rttpg_excerpt":"The MCA has notified the Companies (Amendment) Act, 2019 and the provisions of which, shall be deemed to have come into force on the 2nd day of November, 2018, except sections 6, 7 and 8, clauses (i), (iii) and clause (iv) of section 14, sections 20 and 21, section 31, sections 33, 34 and 35,…","_links":{"self":[{"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/posts\/871"}],"collection":[{"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/dahotreca.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=871"}],"version-history":[{"count":1,"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/posts\/871\/revisions"}],"predecessor-version":[{"id":872,"href":"https:\/\/dahotreca.com\/index.php?rest_route=\/wp\/v2\/posts\/871\/revisions\/872"}],"wp:attachment":[{"href":"https:\/\/dahotreca.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dahotreca.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dahotreca.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}